Hedge fund managers are preparing to buy up portfolios of mortgages in the hurricane-stricken area of the US, according to Dow Jones. The fu...

Hedge fund managers are preparing to buy up portfolios of mortgages in the hurricane-stricken area of the US, according to Dow Jones. The funds are anticipating a resurgence in the New Orleans property market assisted by US federal grants.

Many homeowners in the region, especially those financed by sub-prime loans, will be unable or unwilling to pay their mortgages so funds will be buying up books of loans from regional banks and loan companies in the hope that they will be bailed out by the government.

Some hedge fund managers are in the process of raising funds to invest specifically in distressed mortgage debt in the region. Several hedge funds are also reportedly considering making a move on real estate in New Orleans.

The long term economic prospects for the region remain very uncertain but this may not worry hedge funds which typically focus on shorter-term gains.

Some hedge funds may be reluctant to enter the New Orleans property market for ethical reasons, concerned that they would be seen as profiting from the distress and hardship of the hurricane's victims.